The top travel booking sites are Booking.com, Expedia.com, Hotels.com, Priceline.com, Kayak.com (recently acquired by Priceline), Travelocity.com, Orbitz.com and Hotwire.com. Since Booking.com and Kayak are part of Priceline (PCLN) and both Hotels.com and Hotwire.com part of Expedia (EXPE), this narrows down the top companies in the segment to Priceline, Expedia, Orbitz Worldwide (OWW) and Travelocity. However, there are several others worth considering, such as TripAdvisor (TRIP), which was spun off from Expedia.

According to a report by PricewaterhouseCoopers, the improving economy will result in a 1.8% increase in demand for U.S. hotel reservations this year, which along with a 0.8% increase in hotel supply will lead to higher occupancy rates (62.0%). As a result, RevPAR will be up 5.9%. However, most players have extensive operations in Europe and a growing presence in Asia, which means that they will be affected by growth rates in these regions as well. PricewaterhouseCoopers expects RevPAR growth to slow down in Europe, although some cities will see growth while others (most notably London and Madrid) will see declines.

The global travel market grew 4% in 2012 and is expected to grow another 2-3% this year. The Asia/Pacific region is expected to see the strongest growth (up 6%), followed by Europe and South America (mainly Brazil) at 2% each. North America (mainly U.S. is expected to be flat this year [World Travel Monitor 2012].

Smartphones are playing a key role in travel purchases, especially for last minute purchases. eMarketer expects smartphone travel researchers to grow from 23.7% of total online travel researchers in 2011 to 53.9% in 2016. Similarly, smartphone travel purchasers are expected to grow from 12.6% in 2011 to 32.5% in 2016.

Another report by PhocusWright mentioned that when online penetration of the travel market reached 35% in any country, growth rates were likely to slow down to single-digits. The research firm mentioned that only the U.S., U.K. and Scandinavia had reached this level of penetration and most other markets across Europe, Asia and Latin America would continue to show good growth rates.

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